Singapore Airlines has reached an agreement with Airbus to lease another 15 A330-300s for its fleet.

These aircraft will both replace older Boeing 777s in the Star Alliance carrier's fleet and grow its capacity in the coming years. They will be delivered from the Airbus production line between 2013 and 2015, said SIA.The A330s, which will be powered by Rolls-Royce Trent 700 engines, will be leased for a minimum of six years, with an option for an extension. They will be operated on regional and medium-range routes to Asia, Australia and the Middle East, said the carrier.SIA's fleet already has another 19 A330-300s that it initially got on five year leases, and these could remain in service for even longer. "There is an option to extend that lease, and there is flexibility on the length of the lease extension," said a spokesman.The carrier also has 20 Boeing 787-9s and 20 Airbus A350-900s on firm order, according to information in Flightglobal's ACAS database. The 787s were initially due for delivery in 2011, but multiple delays in the programme means that this has now been pushed to 2013 at the earliest."We remain in discussions with Boeing on the delivery date for the 787s. The first delivery of the A350s is scheduled for the 2013/14 financial year," said SIA's spokesman. SIA CEO Goh Choon Phong added: "Together with the additional [Airbus] A380s that we are taking delivery of this year, as well as A350s and 787s on order for the years ahead, the lease of the A330s is consistent with our longstanding policy of operating a young and modern fleet."The spokesman said that SIA has not decided on the aircraft for its new long-haul low-cost subsidiary, which is due to begin operations within the next year. The airline has said that it would initially provide aircraft to the subsidiary, but the spokesman reiterated that these A330s are for the full service carrier's operations.Receiving more A330s, however, would allow SIA to transfer some 777-200s in its fleet to the new subsidiary. These 777s could be upgraded to have an extended range and their cabin can be retrofitted for the low-cost operations, said industry sources.

Singapore Airlines plans to launch its new medium-haul LCC in April, which will be a wholly-owned subsidiary. At the same time, SIA is moving to take control of its low-cost short-haul carrier Tiger Airways by having a rights issue that will dilute the equity of minority shareholders that fail to participate in the capital raising. SIA estimates its stake in Tiger will increase from 33% to as high as 49%. This will give it effective control, because SIA's major shareholder, Temasek Holdings, is also a sizeable Tiger shareholder.

But the more I think about it, it makes no sense to keep Tiger and the medium-haul LCC seperate.

SIA plans to brand the medium-haul LCC Scoot, but I think it would make more sense to brand it Tiger and connect the short-haul and medium-haul network. After all, that's partly why SIA mainline is successful. Its medium, long-haul operation receives passenger feed from its short-haul subsidiary SilkAir.

AirAsia X's founder Tony Fernandes has said his medium, long-haul operation is successful because it can draw on the short-haul feed from AirAsia and that if AirAsia X didn't have that, it would have been unsuccessful. Fernandes attributes the demise of Viva Macau and Hong Kong's Oasis partly to the fact these were stand-alone businesses, with no passenger feed from which to draw upon.

At this stage SIA is adamant that Tiger and the new medium-haul carrier will remain separate businesses.

But I'm thinking maybe deep down, they do want to connect the two, but are reluctant to say this publicly because one implication is that, Tiger would have to abandon Singapore's Budget Terminal, a major blow to Changi Airport Group. The Budget Terminal is not designed to handle widebodies nor is it designed to cater to transiting passengers. With hindsight, may Changi should have done that.

Singapore Airlines’ (SIA) new medium- to long-haul, low-cost carrier Scoot plans to have its Boeing 777-200s configured with about 400 seats.

Industry research firm Centre for Asia Pacific Aviation (CAPA), citing tender documents issued by Scoot for wireless in-flight entertainment (IFE), says Scoot aims to achieve a seating capacity of about 400 on board its Boeing 777-200s. SIA’s 777-200s currently have a capacity of up to 323 seats.

Scoot will increase capacity by using 10-abreast seating, says CAPA. SIA’s 777s now have nine-abreast seating in economy, with a seat width of about 18.45 in. But the new seating configuration will reduce the seat width to about 17.2 in., it says.

The report says Scoot aims to start flying around April 1 with one aircraft and then add a second, third and fourth aircraft on May 1, June 1 and July 1. Two more aircraft will be added in 2013 followed by two in 2014, three in 2015 and three in 2016. All the aircraft will initially be ex-SIA 777-200s, which means all of Scoot’s initial routes will be medium-haul, rather than long-haul. It will get its first 777-200ER in 2014, it says.

The report also says Scoot has asked IFE providers to present proposals for an interactive wireless entertainment system that can also be used by the airline to drive ancillary revenues, such as sale of food, drinks and duty-free items. Rather than have back-of-seat TV sets, the airline plans to encourage passengers to bring along their own personnel entertainment devices and mobile phones to access the wireless system, which will also provide mobile data and voice services on a user-pays basis, it adds.

Aviation Week reported in May that SIA’s new carrier was likely to configure its 777-200s with 10-abreast seating and that the carrier was likely to initially only operate medium-haul services. Aviation Week also reported in August that SIA had lodged a trademark application in Singapore, for the rights to the name ‘Scoot’, for the new carrier.

Singapore Airlines Ltd. (SIA), the world’s second-largest carrier by market value, said it may order Airbus SAS’s A350-1000 wide-body jet as the European planemaker plans improvements in range and payload.The airline is also awaiting details of enhancements to Boeing Co. (BA)’s competing 777-300ER before deciding which model to purchase, Chief Executive Officer Goh Choon Phong said yesterday in a briefing at Airbus’s headquarters in Toulouse, France. He declined to discuss how many planes the carrier may buy.Airbus in June said it would delay the introduction of the A350-1000 so it could make changes including the use of improved Rolls-Royce Holdings Plc Trent XWB engines. Singapore Air has 20 of the smaller -900 variants on order and also signed a deal for eight 777-300ERs in August to tap demand for long-haul travel.Goh also said the carrier was concerned about a potential economic slowdown and the possibility of tighter credit after Moody’s Investors Service Inc. downgraded Credit Agricole SA and Societe Generale SA, France’s second- and third-largest banks.“The most strategic concern is how the economy is going to go,” he said. “The recent downgrade of banks in France is a concern: the impact, if any, on the liquidity of banks, and whether there’s a contagious effect on the rest of the economy.”A380 HandoverGoh was in Toulouse as Singapore Air took delivery of its 13th double-decker A380. The carrier will get another next month and expects to have received all 19 of the planes it has ordered by mid-2014.The Asia airline is reducing the number of seats on later A380s in the fleet to carry more business-class passengers. The first 11 planes had 471 seats, while the final eight will have 409. That includes an all-business class top floor fitted with 86 seats. The carrier also has options for six more superjumbos.Airbus is due to begin deliveries of the A350-900, the most popular of the A350’s three versions, around the end of 2013. Singapore Airlines will be the second carrier to receive an A350 after Qatar Airways Ltd., Goh said.Changes to the A350-1000 variant include work on the landing gear and the outer part of the wing, Airbus said. The improved performance will allow the aircraft to service routes such as Shanghai to Boston. The planemaker has also delayed the smallest version of the A350, the -800, to focus on developing the -900 variant and revamping its single-aisle A320.Dreamliner CrossoverBoeing’s plans to upgrade the 777 include the adaptation of technology used on the new 787 Dreamliner, Marc Birtel, a spokesman, said by e-mail. He didn’t elaborate and said Boeing doesn’t comment on discussions with customers.According to a report yesterday on the Flight Global website, conceptual studies at Boeing for the 777 upgrade show a massive new carbon fiber wing, 99,500lb thrust engine and other improvements including a 787-style interior.Newer 777s could get a carbon-fiber wing measuring as much as 234 feet (71.3 meters), 21 feet more than the current all- metal version and 10 feet wider than Boeing’s latest 747-8, Flight Global said. The plane might also offer 15 percent more economy seating than on the existing aircraft.Hedging PolicyGoh also said that Singapore Airlines, which closed up 3 percent today and has a value of S$13.4 billion ($11 billion), is particularly concerned about the volatility of fuel prices.“Fuel prices are 40 percent of our costs,” he said. “It’s huge, and to a large extent it’s outside our control. Hedging is only really delaying the impact.”Singapore Air currently has hedging contracts to cover about 30 percent of fuel purchases for the remainder of the year through next March, the CEO said, a figure that’s below the proportion generally hedged at the bigger European carriers.The airline’s board has mandated that management generally hedge between 30 percent and 60 percent of fuel costs, depending on what’s driving prices, he said, adding that increases since late last year have been spurred by geopolitical events in the Middle East and Africa, not necessarily economic fundamentals.“In times when we feel there’s market risk, we’ll tune it to the lower end of the band,” Goh said. “In more normal times, we tweak it back upward.”

The purchased aircraft will go through heavy maintenance checks, with the interiors refurbished and retrofitted for Scoot, Wilson told reporters.

The aircraft will have a two-class cabin with 32 to 40 premium seats and about 370 economy seats in a 3-4-3 configuration.

Scoot will operate out of Singapore's Changi Airport Terminal 2 as the Budget Terminal is unable to accommodate widebodies, added Wilson.

The low-cost carrier, which will be managed separately from SIA, expects to receive its Air Operator's Certificate by the first quarter of 2012.

"We are not a substitution of SIA, the mission is to bring incremental numbers to grow the SIA group. Whether it is new routes or targeting new markets on existing routes, we are incrementing," said Wilson.

He added that Scoot will also be able to leverage on SIA's expertise and experience in fuel hedging and currency hedging, but that the airline has the mandate to make independent decisions when necessary.

SINGAPORE, Nov 3 (Reuters) - Singapore Airlines Ltd (SIA), the world's second largest carrier by market value, posted on Thursday a 49 percent drop in second quarter net profit due to high jet fuel prices and said yields will remain under pressure.

The global airlines industry, which only recovered from its worst-ever downturn last year, is facing new headwinds such as rising jet fuel prices and economic uncertainties in Europe and United States.

"The prevailing economic uncertainty and weak consumer confidence are impacting demand for air transportation. Advance passenger bookings are showing signs of weakness, particularly in Europe and the United States," SIA said in a statement.

"Global purchasing manager indices (PMIs) have also fallen, pointing to weaker demand for air freight. Both passenger and cargo yields are therefore expected to remain under pressure."

Analysts have said SIA's market position has also been undermined by the rise of Middle Eastern rivals such as Emirates for long-haul routes, and aggressive expansion of budget carriers like AirAsia Bhd and Qantas Airways Ltd's JetStar on shorter flights.

The airline, about 55 percent owned by Singapore state investor Temasek Holdings , earned S$194 million ($152.7 million) for the three month ended September compared to S$380 million a year ago.

Its quarterly earnings was inline with the average forecast of S$194.8 million by four analysts polled by Reuters.

The International Air Transport Association (IATA) recently raised its 2011 profit forecast for the airline industry to $6.9 billion from $4.0 billion, but the grouping expects the industry's profit to fall by 29 percent next year.

IATA said in a statement on Thursday that the pace of passenger yield improvements in the third quarter has slowed but was still moving upwards.

SIA said fuel costs rose 35 percent in the first half from a year ago to S$747 million and cut its interim dividend to 10 Singapore cents from 20 cents previously.

Its shares ended 1.7 percent lower on Thursday. The results came after the end of trading hours.

SINGAPORE, Nov 3 (Reuters) - Singapore Airlines Ltd (SIA), the world's second largest carrier by market value, posted on Thursday a 49 percent drop in second quarter net profit due to high jet fuel prices and said yields will remain under pressure.

The global airlines industry, which only recovered from its worst-ever downturn last year, is facing new headwinds such as rising jet fuel prices and economic uncertainties in Europe and United States.

"The prevailing economic uncertainty and weak consumer confidence are impacting demand for air transportation. Advance passenger bookings are showing signs of weakness, particularly in Europe and the United States," SIA said in a statement.

"Global purchasing manager indices (PMIs) have also fallen, pointing to weaker demand for air freight. Both passenger and cargo yields are therefore expected to remain under pressure."

Analysts have said SIA's market position has also been undermined by the rise of Middle Eastern rivals such as Emirates for long-haul routes, and aggressive expansion of budget carriers like AirAsia Bhd and Qantas Airways Ltd's JetStar on shorter flights.

The airline, about 55 percent owned by Singapore state investor Temasek Holdings , earned S$194 million ($152.7 million) for the three month ended September compared to S$380 million a year ago.

Its quarterly earnings was inline with the average forecast of S$194.8 million by four analysts polled by Reuters.

The International Air Transport Association (IATA) recently raised its 2011 profit forecast for the airline industry to $6.9 billion from $4.0 billion, but the grouping expects the industry's profit to fall by 29 percent next year.

IATA said in a statement on Thursday that the pace of passenger yield improvements in the third quarter has slowed but was still moving upwards.

SIA said fuel costs rose 35 percent in the first half from a year ago to S$747 million and cut its interim dividend to 10 Singapore cents from 20 cents previously.

Its shares ended 1.7 percent lower on Thursday. The results came after the end of trading hours.

Airbus will suggest its A350 model to Singapore Air, John Leahy, the planemaker’s chief operating officer, said in aninterview in Singapore today.

“We’re in discussions with them,” Leahy said. “They arealso looking at other aircraft. They issued a request forproposal on that to Airbus, to Boeing, to engine manufacturers.Anything else, I can’t comment.”

“The A380 superjumbo will operate daily to both Mumbai and New Delhi with effect from 30 May 2014, taking over from two daily flights that currently serve each city using smaller Boeing 777s. Another daily flight will continue to be operated with B777s. In total, 14 flights will serve each city per week,” the airline said in a statement.

Start-up carrier Tata-SIA Airlines, which is awaiting flying permit, will take at least 20 Airbus aircraft on lease from a Singapore-based company to launch their operations in India by this winter, reports said.On the sidelines of the ongoing IATA annual general meeting in Doha, Head of Investor Relations of BOC Aviation Pvt. Ltd. Claire Leow said Tata-SIA had placed orders for leasing of 20 Airbus A-320s from them.She said the deliveries of these aircraft might commence from the third quarter of this year - around September-October. BOC Aviation has already leased several aircraft to two Indian airlines - Jet Airways and SpiceJet.